Senior Budget and Tax Policy Analyst
Two years ago, families in Illinois started forking over an additional $1,500 from their annual pay due to higher taxes.
Illinois lawmakers passed a record 67 percent individual income tax hike on Jan. 11, 2011. The tax hike raked in $6.4 billion in new money in 2012. Thats billions taken from the pockets of taxpayers to pad state coffers. Where did all the money go?
The state promised it would pay down its billions in unpaid bills and restore Illinois finances.
But the money didn’t pay down any bills. In fact, the states unpaid bills now total more than $9 billion.
And hiking taxes certainly didn’t repair Illinois sorry financial situation.
So where did your money go? The tax hike went to pensions. Eighty cents of every tax hike dollar went to pay government worker pensions in 2012.
Virtually no tax dollars went to pensions in 2010 and 2011. Thats because Gov. Pat Quinn punted on real reform and simply papered over the problem by borrowing billions to make those payments.
After two years of borrowing billions to hide the ballooning problem, lawmakers backed themselves into a corner. They couldnt make the next pension payment or cover the principal and interest of the newly borrowed money. With the states credit rating at stake, tapping the bond market wasnt an option.
Rather than implementing real reforms, lawmakers chose to hit taxpayers with billions in higher taxes. The cost of punting was crystal clear. It came straight from your paycheck.
Now the annual tax bill for families in Illinois is $1,500 larger, pushing the state tax bill to $3,750 – more than a third of which went to pensions for government workers.
The tax hike was nothing more than another broken promise. And now lawmakers are considering making the tax hike permanent. Or worse pushing through another multibillion-dollar tax hike.
When you hear lawmakers discuss tax hikes, remember the saying, Fool me once, shame on you; fool me twice, shame on me. Dont be fooled again. We must push to repeal the tax hike and force lawmakers to stop bankrolling their spending binge on the taxpayers dime.